Judge: H. Jay Ford, III, Case: 18SMCV00066, Date: 2022-09-20 Tentative Ruling

Case Number: 18SMCV00066    Hearing Date: September 20, 2022    Dept: O

Case Name:  Citizens of Humanity, LLC, et al. v. Jimenez, et al.

SUBJECT:                MOTION FOR FEES PURSUANT TO CCP §425.16(c)

MOVING PARTY:   Defendants Oscar Ramirez and Law Offices of Oscar Ramirez P.C.

RESP. PARTY:         Plaintiffs Citizens of Humanity LLC, Oheck, LLC and Erik Kweon

TENTATIVE RULING

            Defendants Oscar Ramirez and Law Offices of Oscar Ramirez PC’s Motion for Fees Pursuant to CCP §425.16(c) is GRANTED.  The Court awards $108,750 in attorney’s fees as the reasonable fee for the work performed by counsel for the Ramirez defendants.

I.  Applicable Law

            “[A]bsent circumstances rendering the award unjust, an attorney fee award should ordinarily include compensation for all the hours reasonably spent, including those relating solely to the fee.”  Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133.  “The fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.  Such an approach anchors the trial court's analysis to an objective determination of the value of the attorney's services, ensuring that the amount awarded is not arbitrary.”  Id. at 1134. 

            Use of the lodestar does not, however, mean a party seeking attorneys' fees is “necessarily entitled to compensation for the value of attorney services according to the owner's own notion or to the full extent claimed by [attorney].”  Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 950 [inverse condemnation]; Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 813–814 [Song–Beverly Act].) A party seeking fees has the burden of showing the fees incurred area “allowable,” are “reasonably necessary to the conduct of the litigation,” and are “reasonable in amount.”  Levy at 816.

            The hourly rates to be used in computing the lodestar must be “within the range of reasonable rates charged by and judicially awarded comparable attorneys for comparable work.”  Children's Hospital & Medical Center v. Bonta´ (2002) 97 Cal.App.4th 740, 783; PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095  (“The reasonable hourly rate is that prevailing in the community for similar work”).  Particularly where it is difficult to obtain evidence of market based rates for the same type of work, the courts look at fees charged for cases requiring similar skills.  See, e.g., The Utility Reform Network v. Public Utilities Com. (2008) 166 Cal.App.4th 522, 536–537; Prison Legal News v. Schwarzenegger (9th Cir.2010) 608 F.3d 446, 454–455 (“all attorneys in the community engaged in ‘equally complex Federal litigation,’ no matter the subject matter”). 

            In determining the reasonable rate and reasonable hours, the Court looks to that “prevailing in the community for similar work.”  PLCM Group, Inc., supra, 22 Cal.4th at 1095; see Ketchum, supra, 24 Cal.4th at 1132 (“the lodestar is the basic fee for comparable legal services in the community”).  “A reasonable trial court might determine that the ‘similar work’or ‘comparable legal services’ related to insurance defense litigation, rather than to civil litigation in general. Were the court to so conclude, it could view the relevant ‘market’ to be that of insurance defense litigation and litigators, rather than general civil litigation. The “market rate” for such services might be limited accordingly. Again, we emphasize that such determinations lie within the broad discretion of the trial court.”  Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 702–703.

            The burden is on the fee applicant to produce evidence that the requested rates are in line with those prevailing in the community for similar work.  See ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1019.  “Affidavits of the plaintiffs' attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs' attorney, are satisfactory evidence of the prevailing market rate.”  Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1009.

            The trial court is not required to adopt counsel’s opinion as to the “market rate” for services of the type performed.  See Syers Properties III v. Rankin (2014) 226 Cal.App.4^th 691, 702.  The trial court may accept the actual rate charged as the reasonable rate.  Id.

            Ultimately, the fee award, including what constitutes a reasonable rate and the reasonable number of hours spent thereon is a matter of court discretion.  Ketchum, supra, 24 Cal.4^th at 1132.  The award will only be reversed where the Court is “clearly wrong.”  Id.  “The only proper basis of reversal of the amount of an attorney fees award is if the amount awarded is so large or small that it shocks the conscience and suggests that passion and prejudice influenced the determination.”  Akins v. Enterprise Rent-A-Car Co. of San Francisco (2000) 79 Cal.App.4th 1127, 1134.  When a trial court “is concerned that a particular award is excessive, it has broad discretion to adjust the fee downward or deny an unreasonable fee altogether.”  Id. at 1138; 569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 440 (quoting Ketchum). 

II.  Requested fees unreasonable

            The Court is in the unique position of having the benefit of two other fully briefed and adjudicated fee motions for comparable services performed by three other sets of attorneys on this case.  See PLCM Group, Inc., supra, 22 Cal.4th at 1095  (“The reasonable hourly rate is that prevailing in the community for similar work”); see Ketchum, supra, 24 Cal.4th at 1132 (“the lodestar is the basic fee for comparable legal services in the community”).  The work performed on the Mahoney Defendants’ SLAPP and Jimenez’s SLAPP are “comparable” and “similar” to the work performed on Ramirez’s SLAPP.  The underlying SLAPPs raised the same issues, and the appeals all attacked the same single order denying their SLAPPs.  Ramirez fails to identify any way in which the legal issues presented by his SLAPP motion, his SLAPP appeal or his SLAPP fee motion was unlike or distinct from the work performed by Mahoney Defendants’ counsel or Jiminez’s counsel.  For this reason, the prior fees motions provide the Court ample evidence of what a comparable rate for similar services performed by Ramirez’s counsel would be.

            The Court awarded Mahoney Defendants their full fee request.  The award was based on 62.5 hours @ $550 for the underlying SLAPP and (2) 169 hours @ $250/hr and $200/hr for the appeal. 

            The Court awarded Jimenez $83,370 in fees.  Jimenez requested $108,810 based on the notice of motion.  The award was based on rates ranging from $450/hr to $750/hr.  Jimenez’s counsel claimed 158.5 hours.  The Court struck 35 hours of the Kevin Mahoney’s time on as unreasonable and excessive, and 3.2 hours based on duplicative entries.  The Court further reduced the amount requested based on duplication of effort or excessiveness in the amount of $3,525 and $5,025. 

            Ramirez is seeking fees in the amount of (1) 198.4 hours spent by Goldowitz on the SLAPP and the appeal at a rate of $900/hr; (2) 322 hours of attorney time and 11.3 hours of paralegal time on post-remand work at attorney rates of $900 to $1225 and paralegal rates of $300-325. 

            The Court finds the amount requested to be excessive based on comparable attorney rates for similar work performed.  The Court also finds the post-remand work includes work that was not in connection with the SLAPP or SLAPP fee motion, such as time spent attempting to settle, attending CMCs and preparing a 170.6 application.  Ramirez is only entitled to fees and costs incurred in connection with the SLAPP motion.  See 569 East County Boulevard LLC v. Backcoutnry Against the Dump, Inc. (2016) 6 Cal.App.5^th 426, 441 (court’s downward adjustment of hour component for lodestar calculus on SLAPP fee award supported by record because court could conclude many of the hours presented work unrelated to either “merits motion or the fees motion”). 

            Ramirez’s request for fees is based on the combination of unreasonable hourly rates and an excessive number of hours.  It is readily apparent Ramirez requests fees in the amount of $223,200 for the time spent by Mr. Goldowitz’s, alone is excessive.  Incredibly, Ramirez requests additional fees in the amount of $355,837.50 for post-appeal work.  In total, Ramirez seeks fees in the amount of $579,037.50.  The inefficient distribution and duplication of work done between the lawyers and paralegal working on the post-appeal work warrants a substantial reduction for the excessive time spent.  [Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 38 (Trial court's refusal to award fees for six of the 11 attorneys working on case was appropriate remedy for overstaffing.)

            Moreover, given the prior fee awards to Mahoney Defendants and Jimenez, an award in the amount requested by Ramirez would “shock the conscience.”  Akins v. Enterprise Rent-A-Car Co. of San Francisco (2000) 79 Cal.App.4th 1127, 1134 (trial court fee award will only be overturned if it is so low or high that it would “shock the conscience” and suggests fee award was motivated by prejudice and passion).  Based on the evidence presented and the record of this case, the Court finds that the excessive time spent when coupled with excessive hourly rates charged for the work done in this case is grossly excessive and warrants a substantial reduction in the fees to be awarded.  “A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.”  (Serrano v. Unruh (1982) 32 Cal.3d 621, 635, accord, Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137, 104 Cal.Rptr.2d 377, 17 P.3d 735.)

            Based on Ramirez’s evidence in support of the motion regarding the time spent and the rates charged, level of expertise of Ramirez’s counsel, relatively low level of complexity of the issues presented, and the unreasonably inflated total fees requested, the Court finds the reasonable fee for the work performed is $108,750. 

III. No basis for enhancement.

            “The economic rationale for fee enhancement in contingency cases has been explained as follows:  A contingent fee must be higher than a fee for the same legal services paid as they are performed. The contingent fee compensates the lawyer not only for the legal services he renders but for the loan of those services. The implicit interest rate on such a loan is higher because the risk of default (the loss of the case, which cancels the debt of the client to the lawyer) is much higher than that of conventional loans.  A lawyer who both bears the risk of not being paid and provides legal services is not receiving the fair market value of his work if he is paid only for the second of these functions. If he is paid no more, competent counsel will be reluctant to accept fee award cases.”  Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132–1133. 

            “[T]he purpose of a fee enhancement is primarily to compensate the attorney for the prevailing party at a rate reflecting the risk of nonpayment in contingency cases as a class. To the extent a trial court is concerned that a particular award is excessive, it has broad discretion to adjust the fee downward or deny an unreasonable fee altogether.”  Id. at 1138.  “[T]he trial court is not required to include a fee enhancement to the basic lodestar figure for contingent risk, exceptional skill, or other factors, although it retains discretion to do so in the appropriate case; moreover, the party seeking a fee enhancement bears the burden of proof. In each case, the trial court should consider whether, and to what extent, the attorney and client have been able to mitigate the risk of nonpayment, e.g., because the client has agreed to pay some portion of the lodestar amount regardless of outcome.”  Id. 

            The Court also finds no basis to apply an enhancement.  Although hired on a contingency fee basis, Goldowitz was paid by Ramirez’s insurer at a market rate of $225 for insurance counsel.  There was therefore no threat that Goldowitz would not be paid at all.  Moreover, the requested fee award was unreasonably excessive.